Lowe's Q1 Earnings Preview: Can LOW Beat the Odds in a Tough Market?

Core Viewpoint - Lowe's Companies, Inc. is set to report its first-quarter fiscal 2025 earnings on May 21, with investors keenly watching for performance against market expectations [1] Financial Performance Expectations - The Zacks Consensus Estimate for revenues in the upcoming quarter is $20.95 billion, indicating a 2% decline from the previous year [2] - The consensus estimate for earnings per share is $2.89, reflecting a 5.6% decrease compared to the same quarter last year [2] - Lowe's has a trailing four-quarter earnings surprise average of 3.9%, with the last quarter's earnings exceeding the Zacks Consensus Estimate by 5.5% [3] Market Challenges - The DIY home improvement segment is facing challenges due to soft discretionary spending, particularly for large interior projects, as consumers are cautious amid economic uncertainty [3] - The housing market remains subdued, with high mortgage rates and affordability issues negatively impacting home sales and renovation demand, especially among new homeowners [4] Strategic Initiatives - Lowe's is actively addressing changing consumer behaviors and market dynamics, with the Pro segment identified as a key growth driver [5] - The company is implementing a multi-year strategy to enhance product offerings, fulfillment options, and the shopping experience for professional customers [5] - Investments in the Total Home strategy, including supply chain modernization and improved merchandising, are positioning Lowe's to better navigate current challenges [5] Omnichannel and Technology Enhancements - Lowe's focus on omnichannel improvements and productivity enhancements is aiding cost control and expanding customer reach [6] - The relaunch of the MyLowe's Pro Rewards program aims to strengthen customer loyalty and encourage repeat business [6] - The use of advanced technologies, such as AI-driven demand planning and augmented reality tools, is helping align inventory and services with customer needs [6] Earnings Prediction Model - The Zacks model does not predict a definitive earnings beat for Lowe's, as it holds a Zacks Rank of 3 and an Earnings ESP of -0.43% [7][8]